In this study, a two-dimensional fully coupled computational model is developed for simulation of proppant settlement in hydro-fractures with the use of the extended finite element framework. The porous domain is governed by the well-known formulation, which consists of the momentum balance equation of the bulk, in conjunction with the momentum balance and continuity equations of the pore fluid. The hydro-fracture inflow is modeled as a 1D flow on the basis of the Darcy law, in which fracture permeability is incorporated by means of the cubic law. Contact constraints are elaborated to eliminate the overlap of fracture edges and the leak-off flow. Proppant settlement is conducted on the basis of Stokes' law for particle terminal velocity, in which the effects of fracture walls, concentration, viscosity and bridging are incorporated into the model. A fixed-point algorithm is introduced to achieve the optimum combination for the proppant injection. Using the extended finite element method, the strong discontinuity in the displacement field due to crack body, as well as the weak discontinuity in the pressure field due to leakage, is included in the model with the use of the Heaviside and modified level set enrichment functions, respectively. The robustness and versatility of the proposed numerical algorithm in determining the optimum proppant injection is examined through several numerical simulations.